you’re a bother who doesn’t realized when he’s outsmarted, much less outclassed. i’m not saying i am self-educated or even a modestly educated (I have a degree from a fine institution), but is this what Cambridge does to its students?

……I’m afraid this largely vacuous reply is all too typical of your…..yes……blather is not an inappropriate term…..how the heck did Lennie Bernstein get in on the act?……I suppose it’sat least progress that you admit the existence of the deflationary spirals that you had previously denied but as ever it’s hedged around with all kinds of nonsensical casuistry…….since we’re bringing in literary quotations I think one of Disraeli’s (on Gladstone) seems to apply to you “Exuberated by the power of his own verbosity.” ……of course Gladstone was a great man while you are just a silly one

You sound like the Inquisitor! “On several occasions, this pernicious limb of Satan has denied the existence of ORIGINAL SIN, errr, DEFLFATIONARY SPIRALS!” (to paraphrase Leonard Bernstein’s musical Candide).

I don’t deny that something roughly close to what is called a “deflationary spiral” exists, though it is certainly dramatized language. What I deny is that a) they are normal market phenomena, existent inherently in a system that does not include credit inflation b) Keynesianism can do anything to stunt the ultimate effects. What it can do is prolong and spread the effects, making things (in my estimation, any by any measurable amount) worse. That’s because Keynesianism, if I can speak bluntly, is government sanctioned bad accounting. (While we’re on the point, Socialism is, in one respect, the abolition of meaningful accounting.)

If by papering over losses you could cure an economy, the Soviet Union would have never collapsed! Accounting facilitates economy, and if you begin blurring the language of business, the effects will be the same as blurring any other language – miscommunication, leading to miscoordination, and a clumsy, non-efficient economic engine. Like Socialism, Keynesianism is a terrific method for encouraging economic destructionism because it essentially cripples the efficacy of the profit/loss system. I’ll leave you with a quote from Goethe:

“Double entry bookkeeping is one of the most beautiful discoveries of the human spirit…It came from the same spirit which produced the systems of Galileo and Newton and the subject matter of modem physics and chemistry. By the same means, it organized perceptions into a system, and one can characterize it as the first Cosmos constructed purely on the basis of mechanistic thought…Without too much difficulty, we can recognize in double-entry bookkeeping the ideas of gravitation, or the circulation of the blood and of the conservation of matter.”

I’m sure you’ll say that’s all blather.

“eh, i don’t think that the argument of “it is the way it is for a reason” is defensible in this case. i can’t argue with you – governments around the world are (largely) keynesian. that’s true and i’ve never said anything to the contrary.”

……..there you go again…..on several occasions on different threads you’ve denied the existence of proven economic phenomenons like deflationary spirals……… and it’s entirely defensible upon the grounds that in the main and used judiciously Keynesianism works unlike some of the more extreme theories of Hazlitt and co which have proved either flawed or rely on predictions of the sky falling at some point……I’m afraid I don’t have your propensity to deny reality as for example in the matter of gold which is one of your idee fixe’s ……I agree with Uncle Warren that it’s role is basically irrational but like him I don’t deny it’s efficacy

i’m sure you’re a swell fellow. i can’t understand, however, how someone is so married to the idea of keynesianism that they would not bother to investigate other schools of thought. you’re entitled to be a liberal, as much as anyone else is entitled to be of their own personal persuasion. although, i admit i find it a hard pill to swallow that commentators are so rashly irresponsible as to not bother to intelligently defend their position, which, in this case, happens to be the status quo. it frankly doesn’t help my entire opinion of mankind. that’s my issue to deal with, i reckon.

nonetheless, i think i will be proved correct through the happenings of reality. on friday, we will get more unemployment figures, most likely higher than predicted. and the price of gold will continue to climb. at some point these forces will stop; i’d rather they stopped several months ago, but the interventionism will guarantees to prolong the ride.

“third, do you find any relevance in classical economics?’

…….of course……some of their theories have proved correct and others haven’t…..the same is true of Keynes…….the fact is that Keynes has on the whole proved much more right than most of them in the context of a globalised economy and that is why his ideas with some classical adjustments underpin the entire world system of economic management……you may hate all this but it’s a fact

“lol, now i’m a liar.”

……you repeatedly tell lies either explicity or implicitly so I don’t know what else to call you…..in this case you made a claim that was a preposterous and easily disprovable lie and I called you on it by giving an example of a conservative, not a liberal, who has made a career as practising economist and economic commentator and who has recently come to appreciate the merits of Keynesianism….it’s really that simple……your lack of economic knowledge despite your vast, and it is indeed gargantuan, conceit is fairly clear I’d have said, and your bizarre theories risible, but self awareness is not alas one of your merits

i realize you’re approaching ancient age wise (i’m only 18, remember), but could you grow up and actually say something of substance rather than complain? how about you tell everybody how you can increase government spending without decreasing private spending?

of course i realize you’re in no position to debate, and i therefore fully doubt you’ll do anything but call me an assortment of names.

otto, you told me to read a book. you did not give me a claim to refute.

You said:
” And might I add, the Keynesians, so often accusing the free marketers of rigid adherence to ideology (while never spelling out why this is the case, of course), ”

……Unfortunately you’re such a liar you forget how many porkies you tell

spending, you might as well learn early, is not what constitutes, and is not the way to, wealth. wealth is created by the act of production. when a government spends money it does so in one of 3 ways:

1) direct taxation
2) borrowing
3) inflation (printing money, or, in recent times monetizing debt)

so you see, it is a false phrase “government spending.” for the government to spend, it must first take away from the private (i.e., non-governmental) sector. that act either deprives the private sector directly, in the case of taxation; indirectly by crowding out, in the case of borrowing; or surreptitiously (and most destructively) by inflation.

to clear up what “spending” is, and save your potentially a lifetime of confusion (see otto and sinz), let me clarify the options that one is presented with in the real world:

1) save money – that is, put it in bank, do not spend to consume or invest
2) spend money on consumptive goods
3) invest money – money is lent at interest, or invested into equities

it is worth noting that currently our banks, which purport to be savings banks, lend the money put into savings accounts. most of the time they can get away with this (creating credit money), but not always (that’s what causes bank runs). in our supposed enlightenment, we’ve essentially outlawed the bank run, and replaced it with the FDIC and Federal Reserve. being that there is no free lunch, what happens, in practice, is that banks get to socialize losses by inflating the dollar supply.

you can only do one of those three things – this is tautology. when the keynesian says, “there is not enough spending!,” they are really railing against the so-called “hoarders.” to these people, saving money causes further layoffs, further reducing spending, leading to what they call a deflationary spiral, or in layman’s terms, the “paradox of thrift.”

the keynesian does not realize that prices adjust, and will tend to move downward as more people increase their cash reserves. a new equilibrium will be established, in this vulgar “deflationary” period. moreover, the keynesian does not even recognize that people are acting correctly – that in a time of recession, which itself is merely the lifting of the veil of prosperity created by credit inflation, saving is NECESSARY and helpful. instead, he makes villains of the “hoarders,” and says that a wise gov’t can make the best use of private money.

so you see, when you recommend government increase its spending, i see it for what it truly is AND CAN ONLY BE – less money in private hands, i.e., higher taxes. so the schizophrenia sets in for the neo-keynesians – reduce taxes and increase spending. well, sorry, you can’t do both – they are by definition opposites.